Amends GS Chapter 116, Article 29A (University of North Carolina Laboratory Schools) as follows.

Directs the UNC Board of Governors (Board) to designate, upon recommendation of the President of the University of North Carolina (President), at least nine (currently eight) constituent institutions with high-quality educator preparation programs to submit proposals to establish laboratory schools to serve public school students. Directs the Subcommittee on Laboratory Schools (Subcommittee), established under amended GS 116-239.7, to review the proposals and approve at least nine of them. Directs the Subcommittee to oversee the operations of those schools. Provides that the Subcommittee, the chancellor of each constituent institution operating a laboratory school, and the laboratory school itself, are exempt from statutes and rules applicable to local boards of education or local school administrative units.

Defines several new terms, and amends the definition of laboratory schoolto also require schools serve students in at least three consecutive grade levels in the range of kindergarten through eighth grade, and to require that the school be located in a qualifying local school administrative unit, as currently specified.

Amends the caption of GS 116-239.7 to read "The Board of Governors' Subcommittee on Laboratory Schools; selection of laboratory schools; creation of a laboratory school; dissolution." Directs the Board to establish the Subcommittee. Provides that the President serves on the Subcommittee. Authorizes the Board to create a full-time position, within the funds appropriated each year to the Board, to coordinate and support the Subcommittee's work. Replaces the system in which the Board and boards of trustees of constituent institutions adopt a plan for laboratory schools with one in which the Subcommittee designates at least nine constituent institutions to submit proposals, as adopted by their chancellors, to operate a laboratory school in a qualifying local school administrative unit. Directs the Subcommittee to evaluate and approve the proposals, as specified.Deletes the provision requiring the Board to update laboratory school plans to reflect changes to the status of a constituent institution or the status of qualifying local school administrative units at the end of each term. Authorizes proposals for laboratory schools in local school administrative units that do not meet the low-performing schools threshold, if the proposal demonstrates that the laboratory school would primarily serve students who did not meet expected growth in the prior school year. Authorizes the Subcommittee to waive the requirement for the number of low-performing schools for up to three laboratory schools, if the schools are submitted jointly by the chancellor and the local school administrative unit in which the laboratory school would be located, and the Subcommittee determines that the proposed location would satisfy the purposes set forth in GS 116-239.5. Provides for the renewal of terms of operation for schools that continue to meet the statutory requirements that justified their creation, and the discontinuation of those that do not. Directs the Subcommittee to notify the Board of Governors of the end of each term of operation, and designate additional constituent institutions with educator preparation programs establishing laboratory schools when a school is no longer located in a qualifying unit or is no longer meeting the purpose of the Article under a waiver at the end of five years. Directs the Subcommittee to file a copy of resolutions approving laboratory schools with the Department of Public Instruction, and directs the State board of Education, upon the recommendation of the Superintendent of Public Instruction, to approve the creation of the laboratory school. Provides for the Chancellor to propose in conjunction with the local school administrative unit the dissolution or the assumption of laboratory school by a new entity, in the event that a laboratory school's term ends or the constituent institution's educator preparation program is terminated. Deletes the provision concerning the transition of the laboratory school to a public school, and the provision deeming property of the dissolved or transitioned laboratory school to be property of the local school administrative unit.

Amends the caption of GS 116-239.8 to read "Chancellor; powers and duties." Directs Chancellors of constituent institutions designated by the Board to submit proposals for the establishment of a laboratory school. Provides that chancellors are the administrative heads of laboratory schools approved by the Subcommittee, and must provide general direction for the establishment and operation of the laboratory schools. Directs chancellors to adopt policies, procedures, and courses of study for the laboratory schools with input from the advisory board. Authorizes the chancellor to designate the duties required by this article to other personnel. Transfers the powers currently given to boards of trustees under this statute to the Chancellor. Revises the membership of the advisory board created under this statute, increasing the number of its members to 10 (currently, nine), and increasing the length of their terms from two to four years, allowing no more than two complete consecutive terms.

Authorizes students in the laboratory school's local administrative unit who did not meet expected growth, as defined in the statute, in the prior school year to attend the laboratory school, regardless of their enrollment in a low-performing school. Provides that enrollment, up to the capacity of a program, class, grade level, or building, is in the order of application. Provides that students who enroll are not required to reapply for subsequent enrollment periods. Eliminates the priority enrollment for students who did not meet expected growth.

Makes waiver of requirements for principal and teacher licensure for laboratory school principals and teachers contingent upon the recommendation of the Superintendent of Public Instruction, and approval by the Subcommittee. Provides that employees of the constituent institution who work in laboratory schools are considered State employees, and participate in the Teachers' and State employees' Retirement System.

Amends the definition ofschool personnelin GS 116-239.12 (Criminal history record checks) to refer to, amongst currently designated others, staff of the laboratory school (was, employees of the laboratory school) and members of the advisory board (no longer includes members of the board of trustees). Requires advice and input from the advisory board for the policy requiring criminal history checks. Requires the Chancellor to provide the State Board of Education with the criminal history it receives on a person who is certificated, certified, or licensed by the State Board of Education. Provides that the chancellor, constituent institution, advisory board, Department of Public Instruction, and the State Board of Education, and their employees, are not liable for negligence for acts or omissions when carrying out this statute, except for gross negligence, wanton conduct, or intentional wrongdoing that would otherwise be actionable. Transfers responsibilities throughout the statute from the board of trustees to the Chancellor.

Directs the Subcommittee to perform the review and evaluation of the laboratory schools currently required of the Board. Amends the information required in the annual report to the Joint Legislative Education Oversight Committee to include specified information on the statutory categorization of students enrolled in laboratory schools.

Makes technical and conforming changes.

Amends GS 143B-931 (concerning criminal history record checks for school personnel) to authorize the Department of Public Safety to provide criminal history record checks to a Chancellor operating a laboratory school for a person who is employed at the school or who has applied for employment, if the employee or applicant consents to the record check. Directs the Chancellor to keep the information confidential.

Amends SL 2016-94, Section 11.6, to direct that the laboratory schools shall be in operation by the beginning of the 2019-20 school year, and to make conforming changes. Amends the allocation of $1 million, currently appropriated to the Board, to be allocated to the University of North Carolina General Administration, to require it now be used for the work of the Subcommittee, and to designate the allocation for the 2016-17 fiscal year. Amends the required report to the Joint Legislative Education Oversight Committee to require the Subcommittee, instead of the Board, to submit the report.